nce and get $100 off for every year of safe driving. put members first. join the nation. ♪ nationwide is on your side it's that time again. they want your money. >> americans who can afford to should pay their fair share. >> denmark is becoming the first country in the world to impose a fat tax. >> the media applauds fat tax and things they don't like. but we could all pay less if politicia politicians didn't give special breaks to certain people. finally, you'd be surprised at of a sneaky tax.
>> tax cigarettes at about 2 cents each. a bottle of beer. >> so many taxes. that's our show tonight. our tax system is awful. the tax code is unreadable. this is a third event and this is just the beginning of the regulations that go on the explain these two books total 75,000 pages. now some taxes are necessary. there is a cost to government and we need to pay for that somehow. but it's out rageous that we have to spend endless hours figuring out what we owe and the taxes are so complex that most americans pay somebody for help.
and then there's special breaks for certain political people. we should just throw out the whole tax code and start over with something simpler and something understandable. >> you failed miserably. >> we're still trying to persuade everyone, john. in the 2016 elections, it's going to be in the forefront. >> what makes you say you're getting more support? >> even democrats realize this code is indefensible. if you declutter the code, you can cut tax rates across the board. >> not even tax accountants? a simpler idea i get, but why
flat? everybody pays the same, but that's not the most complex part of the code. >> well, if you have more than one tax rate, you open it up for politics to clutter the code again. after 1986, two tax rates 15 and 28%, four years later there's a third rate and bill clinton added two more. with a single rate, everyone knows you're doing so. today you can make a change in the code. six months later, people may discover what actually happened. >> if we had a flat tax, you say this would help charitable giving, but i would lose the deduction for charitable giving. >> when americans have more, they give more. charitable giving in terms of
dollars. in the 1908s, the top rate got cut down from 78% down to 20% people went bizerk. >> even though people say i get a deduction for this, they give anyway without it? >> sure they do. go back to the 19th century. >> you say it would encourage homeownership. the mortgage industry is wedded to the industry rates and they say that encourages homeownership. >> when people have more, they can buy a house. they don't have to be bribed by the government to do it. when you try to stimulate
homeownership artificially, you get the disaster we had years ago. >> in your ideal world, the flat tax would be on a postcard. >> just one sheet of paper or a few key strokes. >> a couple of countries have this. estonia has a flat tax of 71%. it's a new country. over 30 countries around the world. p russia has a tax rate that made ours look simple. >> you're fighting history pushing this.
>> we are the only inventive nation on the earth. >> i look at how this stuff, how it's grown. the tax rate 1% in today's salary if you make 500,000. 6% if you made $11 million. it's come a long way. >> it went crazy after the first world war. income tax is a money machine. they're not going to give it up easily. let's go and have a simplified code. that would be a step from the right direction. let's kill it and start all over again. and to show how stupid it is, they have tried to simplify the code using the existing code.
1,000 pages that show how bad this thing is. it took 1,000 pages to try to simplify it. >> it wasn't well received. thank you. i'm too scared to do my taxes. enemies in l get something government will prosecute me. so i hired bob. he's my accountant. i don't want to have to have an accountant. i have to pay him several thousand dollars a year. probably true. think of what i could do with the money. i could have this delicious steak dinner 200 times a year. i could take this cruise ship in new york to venice and back. i could buy two habitat for
humanity homes overseas. or i could pay three kids tuition at this catholic school. i could go on torturing myself with all the things i could do with that money, but instead let's move on to the size of the tax hike. he wants to address it with higher taxes on rich people. david, you want higher taxes. >> i don't want higher tax rates. here's what i want. the thing you talked about just now, it's not the rates that make the system complicated. it's all those rules that are unreadable that allow people to make money they don't pay taxes on, so the wealthiest people in this country can live tax free. i've shown this in my books. >> not many of them do.
>> yeah, they do. >> really? >> tax free. warren buffet, do you think his return was 1,000th of his wealth? >> he's not tax free. he pays something. he gets dividends that have already been taxed. >> warren buffets income is seen in the tax system is a tiny portion of his actual wealth increase. that's how we need to fix the system. all these rules allow people to not have to recognize income for tax purposes. >> to encourage certain good social behavior. >> let's let the market take care of that. >> will? >> there's always been loopholes and lots of evasion. the biggest problem is that it's really depressed investment.
a flat tax is getting away from this idea of taxing income. i think it's a very sound argument. >> taxable income? >> one rate for everybody. >> it doesn't tax investment doubling and tripling and qu quadrupling. >> sounds like we're all in agreement is that we need simplicity. how can this be? you've got david way over on the left. he works for the new york times. where's the difference? >> we're both concerned about
the workers. we're concerned about the poor. we're concerned about general welfare. the best thing for the poor is to stop this excessive tax burden on investments. >> one thing we disagree about is i think the current tax system protects existing wealth and holds back strivers. if we want a system that will make us more prosperous in the future, we need the strivers. >> are you saying donald trump isn't a striver? >> what about their grandchildren? should they inherit everything?
part of the problem here is the political power that you're seeing that's distorting the system is really focused on protecting existing wealth, not promoting the creation of new wealth. if we had integrity in the new system and simplicity, we would be much better off in the long run. >> do you buy that, the strivers? >> i absolutely buy that. from their first level of income, there's a payroll tax. then we have the loopholes built into that. we need to have something comprehensivable. >> this is so reasonable. why can't it just happen? >> what are the incentives for politicians to do this? what are the incentives when you have to raise tens of thousands
of dollars a week to get reelected? there's no incentive. >> people have to come to you and kiss your ring and beg you for special breaks. you're powerful. thank you, will and david. keep this conversation going. let people know what you think. coming up, to lower their tax bills, thousands of americans move to different states. we'll tell you which ones, but next how government uses this book to manipulate them. >> the federal government provides tax cuts to help individuals qualified houses -- to help replenish key eye nutrients. ocuvite has a unique formula not found in your multivitamin to help protect your eye health. ocuvite.
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i have to do more recordkeeping. they are a way government manipulates people. what do you think? >> what the tax code is doing is trying to choose our values for us. it is telling us charity is good. maybe it is. >> protect our values? i thought government's role was to protect our personal property from the state. >> you know, they decide i need a solar panel, so they're going to give a tax credit for solar. they want me to buy a house, so they're going to give me a tax deduction. if i pay cash, i don't get benefit. they want me to take on debt. >> most people don't pay cash for a house. if people own their houses, they'll take care of them. they'll build communities. that's better for america. >> maybe that's true. >> none of the government's business. >> it's not the government's business to dictate my behavior.
>> encouraging. >> it's encouraging by use of o coercion. if i don't do what they tell me, buy a house, they take away my money. >> look at this disgusting commercial from real estate. >> there's $8,000 in here. >> the national association of realtors wants you take advantage of the first time home buyer tax credit. >> just so brazen. >> this is the benefits from this. there's a pressure group behind each one of these deductions that are benefitting directly. >> mortgage bankers association, association of realtors. >> they benefit because home prices go up. there are more and more of these pressure groups that get formed just for the purpose of getting
these tax deductions. >> take my biggest deduction, my pension. government decided we want people to take care of their future. >> whether i save or not at any given point in my life, should be my decision free of government. saving for retirement is a good thing. everybody should do it. i don't need government to give me an incentive. >> you say you don't need this incentive, but a lot of americans say what is government for accept to steer people to better activities for the good of the country.
>> these are exactly the kind of freedoms we're losing in america every single day as paternalistic government starts managing our lives. >> take charity, then. i don't see how i lose freedom. i freely choose which charities i give to and every buck i give is 50 cents less of what i give to uncle sam. >> given the tax code, go crazy with it. >> i'm less charitable than you. therefore i pay more taxes than you do. >> charity is good. >> who says? i'm not against charity. it's just how important it is that we might disagree.
you want to give it to charity, great. it's not government's job to decide it. there's lots of things influence whether i want to save for retirement or give to a charity. >> any politicians that challenge this bump hurt their chances for winning elections. >> until a few weeks ago, i had a job building wind turbins. i got laidoff when mitt romney got rid of the tax credits. >> he wants to take this guy's job away.
>> investment is flowing into a ridiculous industry like wind power which is so economically inefficient that it absolutely makes no sense. it needs to go to industries that creates lots more employment than the wind farm. this is the problem with the government trying to micromanage the economy and our lives. we need to be left free to do it. >> given they'll run ads like that, can you blame politicians for chickening out? >> we don't elect them to chicken out. the system is built to perpetuate this and to expand it. you're going to see more of this kind of -- when republicans get in, they give it to their favorite groups. when democrats get in, they give it to their favorite groups.
coming up, taxes on sins. did you sin this week? also, how tax code screws the little people. (dad) we've never sold a house before. (agent) i'll walk you guys through every step. (dad) so if we sell, do you think we can swing it? (agent) i have the numbers right here and based on the comps that i've found, the timing is perfect. ...there's a lot of buyers for a house like yours. (dad) that's good to know. (mom) i'm so excited.
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visit floodsmart.gov/pretend to learn your risk. john: want to start a small want to start a small l business? in some way that's easier than every these days, but a business professor says what makes it harder to start a business is the tax codes. it kills little guys. what do you mean? because the code applies to big guys and little guys equally. >> it does. the problem is the big guys have a lot more resources to throw at these pages than small guys. ge, it wouldn't surprise me if they had 500 to 1,000 people
sifting through this. >> they had about 1,000 employees doing just this instead of producing lightbulbs. >> everybody is looking at this at the same time in the same way. ge is finding lots of ways to make it work to their advantage. small businesses cannot do that. >> the national small business association polled businesses and found they spend more than 80 hours a year on federal taxes in two workweeks and payroll taxes two workweeks and sales taxes in one workweek. >> not even paying taxes, but just trying to comply with the tax code. you're not spending time improving products and creating jobs. >> you can't have a tax code that says, we'll give small guys
a break and not big guys. >> no. the point is here not to put small businesses at a disadvantage. you want to create the opportunity to compete. >> what are the odds of creating a tax code for both guys when politicians get a reward for favoring certain people? tv and film producers got a special credit. owners of nascar racetrack and wind turbin makers. >> of course. the odds aren't easy. the odds aren't good. people have been asked this a long time. one thing we haven't done is frame this debate in the language that's popular now. when i look at this, i see
institutionalized opportunity a and inequality. why not start attacking it by taking this thing down from 75,000 pages to something everybody can deal with? >> the 75,000 is beyond this. >> right, right. exactly. >> but the movement is to add more. >> right. >> a little tweak here. >> what's really so tough about that, why this is really an issue, actually today it is probably more than ever easier than ever for your average person to be an entrepreneur with platforms like etsy and paypal. you can put up a store front, ship a product, and collect money in an easier way than before. we have the opportunity to encourage entrepreneurship and we throw a tax code that says,
don't even try. >> you hear from people who have the internet and it is great and stuff, but because of this i'm not going to try. >> not that i'm not going to try, but i'm not going to realize i don't know how to handle this. you either pay somebody a lot of money to do it for you. >> or you buy the software. >> i'm going to roll the dice and hope that no one is checking us closely. do you want to put people in the position that they're rolling the dice? i don't. >> thank you. coming up, a cool way to understand how high taxes persuade some people to just pack up and move somewhere else. e end of thday.
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john: you are stuck with your you're stuck with your ur federal taxes, so in america you have to pay. but having 50 different statesmen you can avoid some taxes if you live in the right states. that creates competition. if your state does something stupid, you can leave and take your talent elsewhere. travis brown built a clever way to track this. >> since 1992 to 2010, the largest time available we can do it from this entire period and show from and to where americans have been going with their feet and taking their wallet. >> the red says people have left
and gone off to the north. >> america's biggest winner is the sunshine state, florida. there are nine states like florida that do not penalize and they tend to do very well. >> people live the income tax states for no income tax states. >> over the 18 year period, they have collected the states with the highest income tax breaks have lost nearly $19 billion. it's been going straight out of new york for florida. in new england, there's one state that stands out.
new hampshire, live free or die is their motto. it does show it's not just about weather. >> california always seems to be red. >> the states in green are receiving california income that have chosen to leave the state. a gain of $18 billion, 10 of which is coming out of lake tahoe. >> florida, montana, wyoming, south carolina, and vermont, biggest winners. >> that's right. the high tax states are giving their income away and lower tax states are doing better and better and better. >> and people watching now, they can download their own version of this just by going to this
website. >> howmanywalks.com. >> it's useful. florida and texas ran these ads. >> 0% personal income tax. that's right. zero. the best place to get away from it all is also the best way to get it all done. grow your company in florida. >> if you're tired of overtaxation, get out. >> tax governor rick perry escalated the tax competition by naming other states and trashing other states. >> if you took the book of regulations in new york, 25,000 pages. we have no state income tax. >> i love that he points out the
other states. >> governor perry is in new york to recruit and get more business. >> new new york is open. open to innovation. that's why new york has a new plan. dozen of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years. >> that's not just lower taxes. certain tax free zones. 140 mltds in promotion for that kind of ad, but it requires you to be selected by your state government in your particular zone. >> apparently, you have to be near private colleges.
retailers are excludes. so are law firms. it sounds like arrogant politicians saying, i'll take this one. not that one. >> by the time you fill out that pap paperwork, you can move to palm beach or austin. >> we see evidence that texas, tennessee, and florida do very well. in wyoming, we have a gain of $1.42 billion. if you want a job an area in the south and north dakota, they're doing very well. >> the weather is really lousy there. this looks this way because you're able to break it down county by county. >> right. chicago is a big part of the $29
billion loss for the state. you can go into let's say cooke county. we can see the relationship as to how much responsibility a city has in governing their state correctly or incorrectly. >> you can download this. coming up, sin tax. do you want to smoke or just have junk food? different states have different plans for taking your money. that's next. get married, have a couple of kids, move to the country, and live a long, happy life together where th almost never fight about money. [ dog barks ] because right after they get married, they'll find some financial folks who will talk to them about preparing early for retirement
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john: want a beer? you must pay extra for it want a beer?ra for it you must pay extra for it because in addition to sales tax, states can impose a sin tax on products like this. when i bought a bottle of whiskey, i had to pay an additional two cents. if you smoke a cigarette, it could cost almost 60 bucks more because politicians tax you to save you from yourself.
what's wrong with that? don't we want government to discourage destructive behavior? no. well, why not? >> if i want to hear about sin, i'll go to church or an anthony weiner press conference. >> a lot of politicians have decided the country is better without people smoking or drinking as much. >> you can say, yeah, there should be a tax on health conditions that get pushed on to other people. when new york city charges $5 in sin tax, they're going too far
on that. they also raise revenue. >> as fewer people smoke, politicians are more eager to raise it. >> that's because people who are fat and smokers, they're minority groups essentially. they can be demonized and you can ratchet up the cost to pay for the things they want. >> the tax has a cost too because it encourages people to cheat. most of the cigarettes sold in new york state are sold illegally. >> 57% of cigarettes sold in new york were brought in illegally. >> it promotes organized crime. >> getting around taxes on
cigarettes -- >> most americans like the idea of elected officials manipulating us in a good way. for a while, we had luxury taxes. we had a tax on private planes, cars valued over $30,000. boats over $100,000. that seems fair. luxury. >> nothing underscores more clearly how sin taxes are symbolic gestures. this happened in the early 90s where people were like, let's go over the billionaires and screw them by taxing them on that. it reduces the demand for yachts. the people who make yachts are not billionaires.
>> they repealed it. >> this impulse to say things are sinful and wrong, in colonial america you could be taxed for wearing fancy ribbon. that's not what america's about. >> it is what america's about. >> it was what america was about. let's tax politicians on new laws and leave the candy bars alone. >> we revere the founders. when george washington was president, they passed a tax on whiskey. >> that is one of the very few
things americans will agree on. there was also whiskey rebellion on that. i think a government would be better if it taxed everything equally as long as we're talking about activities or goods consenting adults are freely choosing. >> research found there was a tax on imported slaves. >> yes, it was an excise tax just like there was on tea. it's kind of disturbing that colonial protesters protested taxes on teas but not slaves. >> a newtown lawmaker proposed a sin tax on violent video games. >> there's not much serious research on this. this underscores the scapegoating that goes on.
demonize video gamers. >> colorado will get money from marijuana. >> that's the upside of sin taxes. the government always wants more revenue. maybe it's not such a bad thing if adults can legally smoke pot and not go on the black market. people are happy to pay the higher tax for a while. that is one of the ways sin taxes can be a powerful agent for liberalizing policies. next how complex taxes invite politicians to use this to punish their enemies. that's not good. do you guys ride? well... no. sometimes, yeah. yes.
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john: done your taxes y done your taxes yet? be careful because what you think is legal may not be. you have good reason to be confused because who can understand this stuff. for example, an orthodontist suggested someone takes clarinet lessons to correct an overbite. accepted. a doctor recommended swimming to
a patient with emphysema. accepted. when a doctor told a fat patient to exercise, the court ruled the whole gym he got was not deductible. if you own a junk yard and you want to get rid of mice, you can deduct the cost of food you give to feral cats, but you cannot deduct the cost of a watchdog to guard your home. that's what you get with junk like this. let's start over with something much simpler. the politicians grab almost as much money from sneaky taxes that you may not even notice. you and i pay them all day long. from the moment i wake up and turn on a light. i pay more when i brush my
teeth. so many taxes. i need a drink. multiple and complex taxes are a threat not just because they take more money from them. they give the ruling people power to punish their critics. >> the internal revenue service targets conservative groups. >> at least we found out about that one. how many other times has this happened that we don't know about? complex tax rules are an invitation to the ruling class to abuse power. our best protection is simplicity. if everyone understands the rules, it's hard to manipulate. better protection would be smaller, limited government.
that's why we do this show. that's all for tonight. see you next week. s s s s s s next. we leaf with you the pretty pictures of spring. finally springing here in washington. ♪ ♪ why can't . i'm chris wallace. two weeks after the close of obama care enrollment, hhs secretary kathleen sebelius steps down. >> there are seven and a half moel million people around the country that have the security of health insurance and that's because of the woman standing next to me here today. >> i think this resignation is the latest indication of what a disaster obama care has been. >> we'll discuss sebelius, the president's nomination of budget director sylvia burwell to replace her and where obama care goes from here. with two members of the senate committee that will hold confirmation hearings. republican tim scott